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Flextronics International Ltd (NAS:FLEX)
Beneish M-Score
-2.36 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Flextronics International Ltd has a M-score of -2.36 suggests that the company is not a manipulator.

FLEX' s Beneish M-Score Range Over the Past 10 Years
Min: -6.71   Max: 1.64
Current: -2.36

-6.71
1.64

During the past 13 years, the highest Beneish M-Score of Flextronics International Ltd was 1.64. The lowest was -6.71. And the median was -2.59.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Flextronics International Ltd for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.8292+0.528 * 0.5445+0.404 * 1.6197+0.892 * 0.551+0.115 * 1.4149
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.6271+4.679 * -0.0419-0.327 * 0.9964
=-2.36

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $2,547 Mil.
Revenue was 6316.762 + 5566.248 + 5951.6 + 7025.054 = $24,860 Mil.
Gross Profit was 396.916 + 352.341 + 378.817 + 408.657 = $1,537 Mil.
Total Current Assets was $8,985 Mil.
Total Assets was $12,660 Mil.
Property, Plant and Equipment(Net PPE) was $2,218 Mil.
Depreciation, Depletion and Amortization(DDA) was $511 Mil.
Selling, General & Admin. Expense(SGA) was $857 Mil.
Total Current Liabilities was $7,033 Mil.
Long-Term Debt was $2,618 Mil.
Net Income was 122.977 + 110.85 + 135.112 + 152.899 = $522 Mil.
Non Operating Income was 1.678 + 0.164 + -94.759 + -5.067 = $-98 Mil.
Cash Flow from Operations was 299.719 + 362.276 + 124.61 + 363.179 = $1,150 Mil.
Accounts Receivable was $2,527 Mil.
Revenue was 6528.517 + 6642.745 + 24761.741 + 7183.442 = $45,116 Mil.
Gross Profit was 377.081 + 380.785 + 362.144 + 398.619 = $1,519 Mil.
Total Current Assets was $8,879 Mil.
Total Assets was $11,920 Mil.
Property, Plant and Equipment(Net PPE) was $2,194 Mil.
Depreciation, Depletion and Amortization(DDA) was $791 Mil.
Selling, General & Admin. Expense(SGA) was $956 Mil.
Total Current Liabilities was $7,056 Mil.
Long-Term Debt was $2,063 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(2546.81 / 24859.664) / (2526.88 / 45116.445)
=0.10244748 / 0.05600796
=1.8292

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(352.341 / 45116.445) / (396.916 / 24859.664)
=0.03366021 / 0.06181624
=0.5445

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (8985.494 + 2218.03) / 12660.339) / (1 - (8879.06 + 2193.966) / 11919.873)
=0.11506919 / 0.07104497
=1.6197

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=24859.664 / 45116.445
=0.551

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(790.844 / (790.844 + 2193.966)) / (511.056 / (511.056 + 2218.03))
=0.26495623 / 0.1872627
=1.4149

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(856.787 / 24859.664) / (955.677 / 45116.445)
=0.03446495 / 0.02118245
=1.6271

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((2618.178 + 7032.78) / 12660.339) / ((2062.926 + 7056.275) / 11919.873)
=0.76229855 / 0.76504179
=0.9964

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(521.838 - -97.984 - 1149.784) / 12660.339
=-0.0419

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Flextronics International Ltd has a M-score of -2.36 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Flextronics International Ltd Annual Data

Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15
DSRI 0.86170.95081.38450.5811.35120.9140.95611.01371.15320.8651
GMI 1.21090.99281.15431.03180.81930.90711.07611.04550.8970.9334
AQI 0.98750.94280.89740.26810.54170.75021.0181.59061.06471.0998
SGI 0.97191.23321.46171.1230.77911.17971.03170.80321.10771.0015
DEPI 0.92951.13440.77690.97890.91511.38680.89870.97211.22460.8219
SGAI 0.90820.9571.00841.08031.00580.8861.06091.14230.98070.9639
LVGI 0.97920.97511.14011.46190.96970.99060.98530.9661.05340.9688
TATA -0.0410.0125-0.083-0.6506-0.0733-0.023-0.0304-0.073-0.0727-0.012
M-score -2.70-2.25-2.14-6.25-2.98-2.59-2.60-2.74-2.60-2.66

Flextronics International Ltd Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.09831.07360.6820.60660.55210.52721.46281.32521.82921.9286
GMI 1.19011.04531.51671.42721.41071.51780.5520.55460.54450.5292
AQI 1.12110.92391.06471.15131.24681.20151.09981.06151.61972.0376
SGI 0.90881.00151.8731.92431.91011.82160.59230.55720.5510.5471
DEPI 0.99551.23860.83060.79770.72370.60321.21181.27371.41491.4835
SGAI 1.13571.10070.65240.60090.57850.58941.4491.56341.62711.701
LVGI 1.05451.0571.05341.00180.97790.97470.96880.97820.99640.9905
TATA -0.0589-0.0675-0.1275-0.0951-0.1139-0.0777-0.004-0.0494-0.0419-0.0314
M-score -2.64-2.74-2.27-2.13-2.25-2.16-2.68-3.08-2.36-2.07
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